The fact that eBay and Skype make strange bedfellows does not mean Skype doesn't have a business model. On the contrary, the business generated revenues of $551 million in 2008, which is a 44% increase year-over-year and represents a 21% profit margin for them. The press releases also states a projected revenue of $1 billion in 2011, twice as much as in 2008.

With promising sales, high adoption rates and an openness to new platforms such as their iPhone app, its not hard to think that Skype will have a booming IPO, and will remove the albatross status from eBay, which can return to its core strengths of online payments and e-commerce.

So the next stop is the "middle 20". These are publicly traded web technology stocks with a market cap over $1 billion. In our analysis below, more than half have a PEG below 1.0, which tends to signal "bargain opportunity" to investors. (caution: of course that is only a starting point for analysis, there could be some real dogs in there). Check out this chart:

So, it is official - there is no bubble in public Internet stocks. There might be in private valuations, but that is almost impossible to analyze accurately without access to hard data on late stage VC valuations.

Anecdotally, it does look like private valuations are higher than public valuations. That is a very odd reversal of normal market rules and will create problems at some stage - the shares have to be sold to somebody who will pay a higher valuation.

A reminder to participate in our weekly poll, about the top Internet companies:

Web Products

Nokia Acquires Symbian; Takes on Google's Android

Nokia isn't finished with its acquisition spree just yet. This week the Finnish company announced a plan to acquire the 52 per cent of Symbian it doesn't already own and make the platform open source. Nokia clearly aims to challenge Android, the open source mobile operating system of Google. Nokia CEO Olli-Pekka Kallasvuo says that it wants to create "the most attractive platform for mobile innovation and drive the development of new and compelling web-enabled applications".

See also: last100's analysis and Setbacks for Google's Android

Evernote Opens to All: Fantastic Promise, Disappointing Execution

The highly anticipated "memory augmentation" service Evernote opened to the public this week and you'll probably want to check this service out just to see what it tries to do. We may change our minds after more lengthy testing, but so far this combination of a bookmarking, note taking and photo cataloging service with apps for the desktop, web and mobile - not to mention the Optical Character Recognition powered search - adds up to a whole lot of potential ... and frustration.

Evri Beta Launches: Search Less - Understand More

Evri, a Paul Allen backed semantic search engine, launched into a limited beta this week. Evri was first shown publicly at the D6 conference. Evri's CEO Neil Roseman likes to talk about Evri in terms of organizing content instead of calling it a search engine. At its core, however, Evri definitely is a search engine, though it adds a very sophisticated semantic layer on top of its results that emphasizes the relationships between different search terms.

Facebook Targets Chinese Market

Social networking site Facebook has launched a Chinese-language version of its web site. Users logging into the site from the Chinese mainland are now being redirected to zh-cn.facebook.com, where users can choose between a version in simplified or traditional Chinese.

See also: China's Facebook Clones

LinkedIn and The Strange Case of The Disappearing (IPO) Market

Is LinkedIn worth $1bn? Yes. Why? Because Bain Capital says it is. The stock is not public, so you and I cannot trade it. The whole notion of the average punter trading tech stocks (or the average punter's pension fund trading it on your behalf) seems rather quaint, from some bygone era. But why has the public market for tech stocks disappeared? Where has it disappeared to? Will it ever return? The LinkedIn financing offers some clues to these questions.

SEE MORE WEB PRODUCTS COVERAGE IN OUR PRODUCTS CATEGORY

Web Trends

Yet Another Unsolicited Yahoo Turnaround Strategy - YAUYTS

Watching Yahoo's decline is rather sad. It is the result of nothing more or less than creative destruction. Meeting that challenge head-on is incredibly tough. Very, very few companies make the transition. IBM, led by Lou Gerstner, met the challenge of the PC era in his epic turnaround (described in the book Who Says Elephants Can't Dance). Microsoft has struggled mightily to remain relevant in the Web era and they are as smart and driven as it gets. What's so incredible is seeing the speed of these transitions - to see a big successful Web start-up like Yahoo marginalized by technology shifts.

Our Kids Are Failing - And It's All Wikipedia's Fault!

Talk about a knee-jerk reaction. This week news broke out in Scotland about how the internet was to blame for Scotland's failing exam pass rates. According to the Scottish Parent Teacher Council (SPTC), Wikipedia, among other sources, was cited as the reason as to why the students were failing. Is this a case of the internet making us stupid? Or do students just need to learn how to use the new research tools of the web a little more appropriately?

Bored With Web 2.0? Demand Change

In April, Umair Haque posted a manifesto on his blog on the Harvard Business Publishing web site where he called for today's investors and start-ups to start building applications to "change the world" instead of just making apps that make money. He challenged Silicon Valley to find a problem to fix that will change the world for the better and then pledged that he would help by providing free consulting. Recently, he revisited this topic...

YouTube Continues to Destroy All Competitors in Declining Video Market

YouTube's huge lead in market share over other online video sites continues to get bigger, even as the over all video viewing market continues a decline. According to traffic analysts Hitwise, YouTube now sees 75.43% of traffic to the online video category; that's up 26% from it's May 2007 marketshare of 59.95%. The nearest competitor is still MySpaceTV, which was down a whopping 44% to 9% marketshare. (Full chart of top 5 sites below.) In April we reported that YouTube's dominance in online video was bigger than Google's dominance in search (67%). The new Hitwise numbers raise a number of questions for us.

See also: The Top 40 Online Video Producers in May - This List Might Surprise You

SEE MORE WEB TRENDS COVERAGE IN OUR TRENDS CATEGORY

That's a wrap for another week! Enjoy your weekend everyone.

2. The best businesses IPO when markets are down. It shows strength. Who cares if it takes 12 months for markets to pickup? Insiders will be locked-in for a while anyway.

3. Facebook cannot IPO. Their $15bn valuation won’t wash with public investors and they can hardly do a down round. So LinkedIn gets the mindshare and public currency to win the next round.

5. LinkedIn keeps innovating, such as their recent move into expert networks to compete with Gerson Lehman Group. This move is an obvious revenue earner.

6. LinkedIn’s revenue model is not tied to advertising and is therefore more recession proof.

7. The bloom is off the Facebook rose, so strike while the iron is hot (sorry about mixed metaphors Ed)

8. We all need some cheery news amidst all this recession talk.

9. Somebody needs to show that public markets are suitable for high growth, high tech businesses and not just dividend-spouting oil companies.

10. Because I forecast that they would and I would love to be proved right.

Finally, why do we always need 10 items on these lists?